legal Eagle
Straight-forward legal tips for Military and Veteran Business Owners By Kelly Bagla, Esq.
ESSENTIAL ADVERTISING RULES FOR BUSINESSES
FTC ADVERTISING RULES Under the FTC, the following general advertising rules must be followed: • Ads must be truthful and non-deceptive • Businesses must have evidence to back up their claims
Go Legal Yourself ® Know Your Business Legal Lifecycle
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ADVERTISING KNOW THE RULES! Award-winning attorney, Kelly Bagla shows you how to avoid legal pitfalls FROM DAY ONE! The last thing an entrepreneur wants is to spend valuable time and resources on legal issues, which is why they often drop to the bottom of the pile. But this can be a COSTLY MISTAKE—and Go Legal Yourself is here to make sure it’s one you avoid. • Gather the right documentation • Protect your brand • Avoid expensive legal pitfalls • Plan and manage growth competatively Rest assured that no nasty legal surprises will stand between you and your success.
www.GoLegalYourself.com As we celebrate the birthday of America (Happy Get your copy at amazon today! Birthday America!), we will all be inundated with sales advertisements and as a business owner, you’ll also want to send out your own advertisements for your products or services for July 4th. Whether your business is a mom and pop operation or has a multistate presence, it is important to be familiar with the applicate state and federal advertising laws.
ADVERTISING RULES The advertising rules that dictate what businesses can and cannot say in ads come from applicable state and federal laws. Typically, these laws focus on truth in advertising, deceptive advertising practices, and unfair advertising. State and federal laws aim to prohibit these advertising practices, require businesses to be truthful about their products or services, and to substantiate claims that they make in advertisements. The Federal Trade Commission (FTC) enforces advertising laws at the federal level, and every state also has a consumer protection agency which enforces state advertising laws. Additionally, the state attorney general has the power to litigate against companies whose advertising harms citizens within their jurisdiction. 42
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• Ads cannot be unfair, meaning the advertisement cannot cause substantial injury to consumers that consumers cannot reasonably avoid. For example, ads cannot make claims about health benefits that will lead reasonable consumers to buying a product, who only find out later that the product is actually harmful. STATE LAW As mentioned, each state also has its own set of consumer protection laws which protect consumers against unfair competition and deceptive advertising practices. Whereas under federal law consumers have very limited rights to sue, under state laws, consumers typically have more power to privately sue companies for false or deceptive advertising. For example, it you own a business and you believe a competitor is using a deceptive ad that could lead consumers to falsely believe that the product they are selling is actually coming from your company, you have several options. You could report the ad to the FTC and they could deal with it, you could sue under the Lanham Act, whether for false advertising or trademark infringement, or both, or you could sue under your state’s unfair competition laws. DECEPTIVE PRICING All bargain ads tout extra low sale prices and this is of course allowed. Just be certain that the sale price is actually a lower price than the regular price of the item. If you are selling a shirt on sale for $50, it had better be the sale price and not the regular price. Making up a fictitious regular price in order to say you have lower sales prices is deceptive and you risk not only being sued but losing the faith of your customers. Additionally, do not advertise that something is “free” unless it really is free. If a customer has to pay for any additional service to obtain the free item, state this fact clearly in the advertisement. Advertising that something is free but then charging customers more for regularly priced items in order to collect the free item is deceptive and illegal.
